Title
W Land Holding, Inc. vs. Starwood Hotels and Resorts Worldwide, Inc.
Case
G.R. No. 222366
Decision Date
Dec 4, 2017
Starwood's "W" mark upheld as actual use in the Philippines via interactive websites, despite no physical presence, affirming trademark validity.
trademark cancellation
intellectual property
bureau of legal affairs
A

Case Summary (G.R. No. 166494)

Factual Background

Starwood filed for registration of the trademark “W” for services in Classes 43 and 44 on December 2, 2005 and obtained registration on February 26, 2007. W Land Holdings, Inc. later applied for registration of its own “W” mark for Class 36 on April 20, 2006, prompting opposition by Starwood. Starwood asserted continued use of its mark and submitted a notarized Declaration of Actual Use (DAU) with evidentiary attachments on December 2, 2008.

Proceedings Before the IPO Bureau of Legal Affairs

Starwood prevailed in the opposition proceeding when the IPO BLA found W Land’s proposed use confusingly similar to Starwood’s earlier-filed mark in a Decision dated April 23, 2008. W Land pursued administrative and judicial remedies, and subsequently filed a Petition for Cancellation of Starwood’s registration for non-use under Section 151.1 of the IP Code, alleging that Starwood had no establishment in the Philippines and had not used the mark in the country.

Petition for Cancellation and the BLA Decision

In Inter Partes Case No. 14-2009-00143, the IPO BLA, in its Decision dated May 11, 2012, granted W Land’s petition for cancellation. The BLA concluded that Starwood’s DAU and attachments did not prove actual use in the Philippines because the supporting materials referenced establishments located abroad. The BLA articulated that use contemplated by the statute required attachment of the mark to goods or services sold or rendered within the Philippines.

IPO Director General’s Decision

On appeal, the IPO Director General reversed the BLA in a Decision dated January 10, 2014. The IPO DG found that Starwood’s DAU and its acceptance by the Bureau of Trademarks established a presumption of proper registration and recognized the interactive Starwood websites and related materials as evidence of actual use in the Philippines. The IPO DG applied Rule 205 as amended by Office Order No. 056-13, which enumerated online materials and downloaded web pages as acceptable proof of use when they showed goods or services being rendered in the Philippines. The IPO DG emphasized protection of Starwood’s intellectual property rights in the absence of proof of abandonment.

Court of Appeals Proceedings and Ruling

The Court of Appeals, in a Decision dated June 22, 2015, affirmed the IPO DG. The CA described the hotel business as peculiarly suited to reservations and bookings that may be made and accepted at a distance, noted the internet’s role in reaching consumers without a physical presence, and agreed that Starwood’s interactive websites indicated actual use of the “W” mark in the Philippines. The CA found Starwood to be the true owner of the mark and concluded that W Land failed to show abandonment or non-use sufficient to cancel the registration.

Issue Presented to the Supreme Court

The dispositive issue before the Supreme Court was whether the Court of Appeals correctly affirmed the IPO DG’s dismissal of W Land’s Petition for Cancellation of Starwood’s “W” mark for non-use.

Supreme Court’s Legal Analysis and Reasoning

The Court reiterated trademark law fundamentals under the IP Code: a mark performs origin, quality-assurance, and advertising functions; registration creates a prima facie presumption of validity and ownership but may be overcome by proof of non-use. The Court observed that the IP Code and the Trademark Regulations require genuine, not token, use of the mark. The Court construed Rule 205, as amended by Office Order No. 056-13, to accept certain online materials—such as downloaded website pages and online sales receipts—as evidence of actual use in the Philippines when they show that goods or services are being sold or rendered in the country.

Application of Rule 205 and the Internet-Use Doctrine

The Court acknowledged international and comparative authorities recognizing that the Internet has transformed the marketplace and that online use may constitute trademark use when it produces a commercial effect in the target State. The Court emphasized that mere exhibition on the internet is insufficient; the registrant must show an actual commercial link to the Philippines or intentional targeting of Philippine customers. The Court identified relevant indicia of targeting or commercial effect: local contact information, specific reference to local customers, a dedicated local webpage, use of domestic language and currency, acceptance of domestic payment methods, and domain names or other interactive features enabling within-State transactions.

Evidence and Findings on Use in the Philippines

Applying these principles, the Court found that Starwood had demonstrated use of the “W” mark in the Philippines through its interactive online presence. Starwood registered Philippine domain names (e.g., whotels.ph, wreservations.ph), maintained websites accessible to Philippine residents, provided a Philippine contact number (+80032525252), used English as a site language, allowed price display and payment options convertible to Philippine Peso, and furnished data showing increasing visits from Philippine internet users since 2003. The websites enabled instantaneous booking and payment for accommodations at Starwood’s W Hotels worldwide with immediate confirmation. Taken together, these features showed

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